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They warn of negative trends in economic activity for 2019



Level economic activity 2018 shows negative behavior from the second quarter and changes in this trend are not expected in the short term. As indicated by Regional and Economic Consultations (E & R), predicting that the first quarter of 2019 follows the same path and also becomes "complicated by the level of activity to continue resilience."

"Then in the best scenario, the best that can be expected is for the economy to stop falling and positive numbers to emerge -tibios- from the second quarter in 2019, "the report's authors indicated," it would be more statistical than a real improvement for the company. I mean, Companies – especially SMEs – will not experience continuous improvement their thermal sensations, "they said.

However, "if in the second half of the summer the new exchange round and the dollar, inflation, inflation expectations and interest rates will rise again, activity levels may continue to fall further until 2019". "Our baseline scenario estimates and projects variations in GDP around -3.0 percent (2018) and -1.5 percent (2019)," they added.

And they continued: "In this case, it is necessary to consider that if GDP closes this year at -3.0 percent, this performance will leave a statistical barrier of -3.1 percent, which implies a statistical backpack that is very difficult to fight and last year "In their estimation, the activity level, by the end of 2019, will be around 3.7 percentage points below the activity level at the end of 2015.

E & R specialists also warned that "credit to the private sector remains scarce, interest rates will continue to be high during 2019, even in the most optimistic scenarios." "On the other hand, if a new exchange round will emerge and the dollar will rebound again, inflation expectations will rise again, inflation will rise again and the interest rate will still end at a higher threshold than the present and recorded. Last October", they added.

For Economa & Regions, "in this scenario, there will be less credit and more expensive than at present, the activity level will suffer more than projected." The truth is that from the changing economic team of the coalition government we are betting now on optimism to project 23 percent inflation for the coming year.

Meanwhile, there are some economists who have given up the promise of the government of President Mauricio Macri. Former director of the Central Bank of the Republic of Argentina (BCRA), Aldo Pignanelli, predicts 2019 with 35 percent inflation. Meanwhile, Jos Luis Espert said: "This shows some slowdown in inflation which allows us to think of 2019 inflation which is somewhat lower than 2018, but does not mean 23 percent."


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